New to property investing

[John Angel]

Hello,
I am currently a new investor. I don't have any properties other than the one we live in now that is paid off. Currently trying to decide on which area to go into, either the Buy-and-Hold to generate stable income or STR which I feel is more risky. I was trying to use the rent calculator but every time I entered numbers, there always was a negative return. The only way it became positive is if I paid 50% of the cost of the home. Not sure what I am doing wrong. It doesn't seem to boost my confidence in buying a property. Perhaps because I am calculating on a single family home instead of an apartment unit?

[Melissa Justice]

@John Angel,

Hey John - thanks for sharing your situation. It’s totally normal to feel overwhelmed or unsure when you're first running numbers, and honestly, you’re already ahead of most new investors by even using a calculator and trying to understand the returns.

A few things to consider that might help clarify what’s happening--
Why the Numbers Might Look Off:
Single-family homes often have tighter margins than multi-family or small apartment buildings, especially in today’s market with higher interest rates and prices, but they are less risky in the sense of vacancy and turnover, tenant quality and maintenance and class neighborhood. You're only dealing with one family unit vs. multiple that are sharing walls etc.

The calculator may not reflect all the real-world variables like value-add potential, appreciation, tax advantages, or rent increases over time.

STRs (Short-Term Rentals) can look riskier or better depending on occupancy assumptions, local demand, and regulation and yes, they do carry more volatility than long-term buy-and-hold.

Tips to Improve the Numbers:
Try different markets with turnkey rehabs or new builds with lower purchase prices and stronger rent-to-price ratios like Birmingham or Huntsville, AL, Wichita, KS, San Antonio, Dallas, or Houston, TX, Columbus, GA, or Akron & Canton, OH - all landlord friendly states with lower entry points.

Use realistic estimates for rent, taxes, insurance, and maintenance. 

Run scenarios with leverage, like 20–25% down instead of 50%, if your comfort allows. Leverage can help cash flow if done wisely.

You’re not doing anything wrong - you’re just in the early stage of analyzing deals, and it’s part of the process. Every experienced investor has been in your shoes at some point. The key is to focus on learning the numbers, comparing markets, and aligning your strategy with your risk tolerance.

Buy-and-hold is a great starting point for stable, long-term growth, especially if you’re more conservative. And you already own your primary home free and clear, which gives you a solid financial foundation to work from.

Always happy to talk more about specific markets or run deal scenarios side by side of what's worked for other investors and myself.

Best of luck!